Scheduled maintenance: Thursday, December 8 from 5PM to 6PM PST
hello quizlet
Home
Subjects
Expert solutions
Create
Study sets, textbooks, questions
Log in
Sign up
Upgrade to remove ads
Only $35.99/year
PFP Chapter 3
Flashcards
Learn
Test
Match
Flashcards
Learn
Test
Match
Terms in this set (11)
what is the time value of money? How is it related to opportunity cost?
more than a dollar received tomorrow because it can be saved and earn interest.
The time value of money
is a measure of the opportunity cost of spending a dollar.
The time value of money concept is most commonly applied to
single dollar amounts (annuities) , where both present and future values can be determined.
An annuity is
a stream of equal payments that are received or paid at a determined interval
compounding is the
process by which the money you are holding accumulates interest over time
compounding can help you
forecast the funds that will be available to you at retirement
What two methods can be used to calculate future values are
future value interest factors or financial calculator
Determining the present value of an amount is useful when you want to
-know how much money to set aside to have a specific amount in retirement
-know how much money to set aside to have money for a vacation in two years
-have 20,000 for a down payment on a house in three years
the formula used to determine the present value of an annuity is
PVA=PMTxPVIFA i,n
The formula used to determine the present value of an annuity is: Present value of an annuity = regular payment ' present value interest factor for an annuity i,nb for an interest rate i and a number of periods n (PVIFA).
The present value of annuity indicates what a series of
individual cash flows is worth to you now if you can invest your funds at an interest rate
How would you modify the future value of an annuity (FVA) equation to determine what you need to save each month to have a specific amount at a specific time in the future.
the future value of an annuity equals the payment times the future value interest factor for an annuity i,n as in the following equation
FVA= PMT x FVIFA i,n
So the payment equals the future value of an annuity divided by the future value interest factor for an annuity i,n as in the following equation
PMT= FVA/FVIFA i,n
Students also viewed
CAFF 223 Ch 3 HW
10 terms
Personal Finance- Chapter 3
28 terms
Lesson 2
22 terms
Personal Finance Chapter 3
15 terms
Sets found in the same folder
PFP 105 Chapter 1
23 terms
PFP 105 Chapter 2
16 terms
PFP 105 Chapter 4
19 terms
PFP Chapter 5
19 terms
Other sets by this creator
ROM for UE
28 terms
Bones of the forearm and hand
9 terms
Topographical Views of forearm and hand
18 terms
Foundations of Electrotherapy
69 terms
Verified questions
algebra
Use the distance formula d = rt (where d is the distance, r is rate, or speed, and t is time spent driving) to answer each question. Janelle pedals her bicycle at a rate of 12 mi/h. How far does she travel in 25 minutes?
statistics
A time and motion study measures the time required for an assembly-line worker to perform a repetitive task. The data show that the time required to bring a part from a bin to its position on an automobile chassis varies from car to car with mean 11 seconds and standard deviation 2 seconds. The time required to attach the part to the chassis varies with mean 20 seconds and standard deviation 4 seconds. The study finds that the times required for the two steps are independent. A part that takes a long time to position, for example, does not take more or less time to attach than other parts. Find the standard deviation of the time required for the two-step assembly operation.
calculus
Find the exact value of each expression. $$ \arctan 1 $$
pre algebra
Tell whether the points form a right triangle. (0, 8), (2, 2), (11, 6)
Recommended textbook solutions
Numerical Analysis
9th Edition
J. Douglas Faires, Richard L. Burden
873 solutions
Book of Proof
2nd Edition
Richard Hammack
340 solutions
Topology
2nd Edition
James Munkres
622 solutions
The Heart of Mathematics
4th Edition
Edward B. Burger, Michael Starbird
1,757 solutions
Other Quizlet sets
Midterm Marketing
33 terms
Finance Exam 2 Study Guide
25 terms
pols unit 3
14 terms
Biology: Chapter 8: Developing a Theory of Evoluti…
22 terms